New Zealand's Reserve Bank was the first in the world to try to lift rates back to some version of normal after the global financial crisis. It was also the first to beat a retreat as commodity prices collapsed last year.

It looked like a bit of a misstep, and it may still be, but it looks a little less awkward now the United States and many other central banks around the world are facing a similar backdown.

If anything, New Zealand appears to have been ahead of the curve once again, albeit a curve that is anything but positive this time.

This year was supposed to herald a return to normal for the US economy.

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The Federal Reserve raised rates late last year and was on track for four more hikes this year. This should have been the full stop on the recovery.

But the market has said no, or rather, screamed no. After a Wall St meltdown there are now growing expectations that US rates will stay on hold this year and there is even talk of a reversal.

There are many reasons for the Wall St slump but stepping back from the detail it is hard not to see this as something of a standoff between the investment sector and the central bank.

The big global economic issues aren't new. China is slowing, oil and other commodities have slumped and there is a deflationary trend threatening growth across the Western economies.

For 18 months or so none of this bothered financial markets which pushed on to record highs. Then suddenly at the first signs that rates were on the rise they have spat the dummy.

Stock sell-offs on Wall St, bond panics in Europe - the threat of the big economic issues spilling over to the banking and finance sector has added an acute sense of fear to the situation.

At the first signs that rates were on the rise they have spat the dummy.

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If there is still no way for central banks to return rates to normal eight years after the GFC, then it begs the question - what is normal?

Federal Reserve chair Janet Yellen believed the US recession risk was low and suggested rate hikes were still on the cards this year.

But her optimism was tempered with discussion about the potential to drop rates below zero if required.

In Europe and Japan they have already done that and have nowhere left to go - at least in terms of traditional policy - if conditions continue to deteriorate.

The Reserve Bank certainly has scope to cut rates further if required.

But the relative benefits of further cuts are doubtful.

There is a risk they would simply fuel an extension of the property boom and leave the country even more exposed on that front.

Governor Graeme Wheeler has demonstrated a willingness to tolerate lower levels of inflation rather than risk over-stimulation.

But if the US Fed pauses or reverses he may have no choice. Our dollar will start to look enticing to speculators and rise again. With commodity prices in bad shape our exporters can't afford that.

New Zealand's economy remains relatively robust and we are lucky to have more policy options than most, but it feels as if the stakes have risen sharply in the past few weeks. Steering a safe course won't be easy.